SCHEDULE 14A
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (section mark) 240.14a-11(c) or
(section mark) 240.14a-12
[ ] Confidential, for use of the Commission only (as permitted
by Rule 14 a-6 (e) (2)
CBT CORPORATION
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22 (a)(2) of Schedule 14 A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
2) Aggregate number of securities to which transaction
applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ x ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
(Logo of CBT Corporation appears here)
CBT CORPORATION
333 Broadway
Paducah, KY 42002
Dear Stockholder:
The annual meeting of stockholders will be held on Tuesday,
April 18, 1995, at 2:00 P.M., Paducah time, at the main office
of Citizens Bank and Trust Company, 333 Broadway, Paducah,
Kentucky. The formal Notice of the Meeting and Proxy Statement
appear in the pages that follow.
In addition to the election of directors, stockholders will
be asked to consider and vote upon an amendment to the Articles
of Incorporation regarding the indemnification of officers and
directors.
We recommend that you vote for the amendment referred to
above, which is set forth in more detail in the accompanying
Proxy Statement.
Sincerely,
WILLIAM J. JONES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
March 7, 1995
PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE, IF YOU DO NOT EXPECT TO BE PERSONALLY PRESENT AND WISH YOUR
STOCK TO BE VOTED. IF YOU LATER FIND THAT YOU MAY BE PRESENT OR FOR ANY OTHER
REASON DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO PRIOR TO THE TIME THE PRESENCE
OF A QUORUM HAS BEEN DETERMINED AND DECLARED.
(Logo of CBT Corporation appears here)
CBT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 1995
TO THE HOLDERS OF COMMON STOCK OF CBT CORPORATION:
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of CBT
Corporation, (the "Corporation"), a Kentucky corporation, will be held at the
main office of Citizens Bank and Trust Company, 333 Broadway, Paducah, Kentucky,
on Tuesday, April 18, 1995, at 2:00 p.m., Paducah time, for the following
purposes:
1) To elect directors to hold office until the next annual election and
until their successors shall be duly elected and qualified;
2) To amend the Articles of Incorporation to adopt a new Article XIII
dealing with the indemnification of officers and directors; and
3) To transact such other business as may properly come before the meeting.
Only holders of common stock of record at the close of business on February
10, 1995, will be entitled to vote at the meeting or any adjournment thereof.
By Order of the Board of Directors,
WILLIAM J. JONES
PRESIDENT AND CHIEF EXECUTIVE OFFICER
March 7, 1995
(Logo of CBT Corporation appears here)
CBT CORPORATION
333 Broadway
Paducah, Kentucky 42002
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of CBT Corporation (the "Corporation") of proxies to be
voted at the annual meeting of stockholders to be held on Tuesday, April 18,
1995. Any stockholder giving a proxy has the right to revoke it by a written
notice delivered to the Secretary of the Corporation, P.O. Box 2400, Paducah,
Kentucky, 42002-2400, or in person at the meeting, prior to the time the
presence of a quorum has been determined and declared. All proxies will be voted
in accordance with the directions of the stockholder and to the extent no
directions are given, will be voted "for" the nominees for directors and "for"
the amendment to the Articles of Incorporation.
This Proxy Statement and form of proxy are first being mailed to
stockholders commencing on or about March 7, 1995.
The Corporation will bear the entire cost of soliciting proxies.
Solicitation will be primarily by mail. Certain officers of the Corporation and
its subsidiaries may solicit proxies personally or by telephone or special
letter, but such persons will not be specially compensated for such services.
SHARES OUTSTANDING AND VOTING
Only stockholders of record at the close of business on February 10, 1995
are entitled to notice of, and to vote at, the annual meeting. As of February
10, 1995, there were issued and outstanding 7,952,358 shares of common stock.
The Corporation has no class of stock other than common stock. Each share of the
common stock is entitled to one vote on all matters presented to the
stockholders with the exception of the election of directors. In the election of
directors, cumulative voting rules apply. Under cumulative voting, each
stockholder is entitled to cast as many votes in the aggregate as shall equal
the number of shares of the common stock owned by him or her multiplied by the
number of directors to be elected. Each stockholder, or his or her proxy, may
cast all of his or her votes (as thus determined) for a single nominee for
director or may distribute them among two or more nominees, at the stockholder's
discretion. As to the authority of the persons named as proxies in the
accompanying proxy card to cumulate votes, see the section entitled "Election of
Directors".
As of February 10, 1995, the trust department of Citizens Bank and Trust
Company ("Citizens") held of record 992,352 shares of the Corporation's common
stock in a fiduciary capacity representing approximately 12.5 percent of the
Corporation's outstanding shares of common stock. With respect to 368,797 shares
(approximately 4.6 percent), the instrument creating the trust or fiduciary
relationship specifically directs Citizens to vote the shares and the shares
will be voted "for" the proposals presented for consideration. The remaining
shares held by the trust department of Citizens will be voted at the direction
of the beneficial owners.
As of February 10, 1995, to the knowledge of the Corporation, there were no
other record or beneficial owners of more than 5 percent of the Corporation's
issued and outstanding common stock.
Under cumulative voting, the seventeen nominees receiving the most votes
cast for the election of directors at the annual meeting will be elected, which
means that abstentions and broker non-votes will have no effect on the outcome
of the vote. Under the Corporation's articles of incorporation and bylaws and
the Kentucky Business Corporation Act, the proposal to amend the articles of
incorporation to add a new Article XIII relating to indemnification will require
an affirmative vote of a majority of the shares of common stock voted on the
proposal, with shares owned by or voted under the control of any director and
related entities excluded. Abstentions and broker non-votes are not counted in
determining the number of votes cast and in effect represent no action taken on
the matter by the shareholder, although they do reduce the number of votes
required for the approval of the proposal.
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BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
OF COMMON STOCK OF THE CORPORATION
Set forth below is information with respect to shares of common stock of
the Corporation beneficially owned as of February 10, 1995 by the current
director-nominees, the executive officers named in the Summary Compensation
Table herein, and all director-nominees and executive officers of the
Corporation as a group. Unless otherwise noted, the named person has sole voting
and investment powers with respect to the reported shares. Where the holdings of
a family member are noted as being held "individually", the family member has
sole voting and investment power with respect to the shares. Where joint
ownership is noted, the joint owners share voting and investment power as to the
shares
AMOUNT AND NATURE OF PERCENT OF CLASS
NAME BENEFICIAL OWNERSHIP OUTSTANDING
Irving P. Bright, Jr.................................................................. 57,339 **(1)
John L. Burman........................................................................ 47,954 **(2)
Patrick J. Cvengros................................................................... 87,160 1.1(3)
William H. Dyer....................................................................... 54,568 **
Louis A. Haas......................................................................... 347,330 4.4(4)
Joe Tom Haltom........................................................................ 291,032 3.7
Kerry B. Harvey....................................................................... 29,464 **(5)
F. Donald Higdon...................................................................... 2,838 **
M. Leon Johnson....................................................................... 59,609 **(6)
William J. Jones...................................................................... 42,959 **(7)
Ted S. Kinsey......................................................................... 19,750 **(8)
Louis M. Michelson.................................................................... 6,646 **(9)
Bill B. Morgan........................................................................ 213,267 2.7(10)
C. Thomas Murrell, III................................................................ 4,371 **(11)
Louis D. Myre, MD..................................................................... 36,640 **(12)
J. Russell Ogden, III................................................................. 34,540 **(13)
David M. Paxton....................................................................... 3,300 **(14)
Robert P. Petter...................................................................... 24,420 **
Joseph A. Powell...................................................................... 22,098 **(15)
John E. Sircy......................................................................... 200 **
William A. Usher...................................................................... 8,000 **
All directors and executive officers of the Corporation and its subsidiaries as
a group (26 persons)................................................................ 1,423,858 17.9
**Represents less than 1 percent of total outstanding shares of common stock.
(1) Shares represented include 6,172 shares owned individually by Mr. Bright's
wife and 12,000 shares in a trust for which she serves as Trustee.
(2) Shares represented include 22,474 shares individually owned by Mr. Burman's
wife.
(3) Shares represented include 32,676 shares owned jointly by Mr. Cvengros and
his wife and 5,294 shares of vested stock options.
(4) Shares represented include 5,904 shares held in custodian accounts for Mr.
Haas' children, 7,886 shares owned jointly by he and his wife and 177,108
shares of an estate for which Mr. Haas serves as executor.
(5) Shares represented include 19,500 shares owned jointly by Mr. Harvey and
his wife, 100 shares owned jointly by Mr. Harvey's wife and daughter, and
16 shares owned jointly by Mr. Harvey and his daughter.
(6) Shares represented include 9,861 vested shares held by the Corporation's
Retirement, Savings, and Profit Sharing Plan.
(7) Shares represented include 2,556 vested shares held by the Corporation's
Retirement, Savings, and Profit Sharing Plan and 39,167 shares of vested
stock options.
(8) Shares represented include 10,884 shares jointly owned by Mr. Kinsey and
his wife, 300 shares owned individually by Mr. Kinsey's wife, and 2,000
shares owned individually by Mr. Kinsey's children.
(9) Shares represented include 1,596 shares owned by Michelson Jewelers, Inc.
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(10) Shares represented include 4,850 shares owned by Mr. Morgan's wife, 98,724
shares owned by Mr. Morgan's father, 600 shares owned by Mr. Morgan's son,
1,745 shares owned by Mr. Morgan's daughter and son-in-law, 9,704 shares
owned by Mr. Morgan's sister and brother-in-law, 1,504 shares owned by Mr.
Morgan's sister and brother-in-law, and 4,384 shares owned by Mr. Morgan's
brother and sister-in-law.
(11) Shares represented include 304 vested shares held by the Corporation's
Retirement, Savings, and Profit Sharing Plan and 3,167 shares of vested
stock options.
(12) Shares represented include 15,312 shares owned individually by Dr. Myre's
wife and 4,140 shares in a trust for which she serves as a Trustee.
(13) Shares represented include 90 shares held in custodian accounts for Mr.
Ogden's children, 8,784 vested shares held by the Corporation's Retirement,
Savings, and Profit Sharing Plan and 25,167 shares of vested stock options.
(14) Shares represented include 3,200 shares owned jointly by Mr. Paxton and his
wife.
(15) Shares represented include 3,438 shares owned individually by Mr. Powell's
wife.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's executive officers, directors and persons who own more than ten
percent (10%) of the Corporation's common stock to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC"). Such
persons are required by SEC regulation to furnish the Corporation with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it or
representations from such persons that no Form 5s were required, the
Corporation believes that all filing requirements applicable to its officers,
directors and greater than ten percent (10%) beneficial owners were complied
with in 1994 with the following exceptions: failure to file Form 3 on a timely
basis on behalf of John E. Sircy, Jimmie J. Ellington, and John E. Peck, with
respect to their election as executive officers of the Corporation; failure to
file a timely Form 4 covering two transactions on behalf of M. Leon Johnson,
executive officer of the Corporation; failure to file a timely Form 4 covering
one transaction on behalf of Kerry B. Harvey, director of the Corporation;
failure to file an accurate Form 3 on a timely basis on behalf of Ted S. Kinsey,
director of the Corporation; and failure to file timely three Form 4s covering
one transaction each on behalf of Ted S. Kinsey. All of the preceding exceptions
were corrected as soon as they were discovered.
PROPOSAL ONE
ELECTION OF DIRECTORS
Among items to be acted upon at the annual meeting of stockholders is the
election of seventeen directors to the Board of Directors of the Corporation.
Each of the persons elected will serve a term in office of one year and until
his successor is duly elected and qualified. All nominees for director are
currently directors of the Corporation.
Set out below is information concerning all of the current directors and
director-nominees of the Corporation, including their positions held with
Citizens Bank and Trust Company ("Citizens"), Bank of Marshall County ("BMC"),
Pennyrile Citizens Bank & Trust ("Pennyrile"), Graves County Bank, Inc.
("Graves"), United Commonwealth Bank, F.S.B.("United"), and Fidelity Credit
Corporation ("FCC").
IRVING P. BRIGHT, JR., 62, business consultant. Until 1994, Mr. Bright was
the President and Chief Executive Officer of Bright's, Inc.(a retail clothing
store). Mr. Bright has been a director of the Corporation since 1983. He also
serves as a director of Citizens.
JOHN L. BURMAN, 61, manager of Kentucky Farm Bureau. Mr. Burman has been a
director of the Corporation since 1993. He also serves as a director of
Pennyrile.
PATRICK J. CVENGROS, 58, retired. Until 1992, Mr. Cvengros served as the
President and Chief Executive Officer of the Corporation. Mr. Cvengros has been
a director of the Corporation since 1983. Mr. Cvengros also serves as a director
of Citizens and FCC, as well as serving as a director of Computer Services,
Inc., Paducah, Kentucky.
WILLIAM H. DYER, 59, President and Chief Executive Officer of Tennessee
Valley Towing (a river barge company). Mr. Dyer has been a director of the
Corporation since 1991. Mr. Dyer also serves as a director of Citizens.
LOUIS A. HAAS, 53, investor. Mr. Haas was formerly the President and Chief
Executive Officer of DuBois Pharmaceutical (a wholesale pharmaceuticals
company). Mr. Haas has been a director of the Corporation since 1991. Mr. Haas
also serves as a director of Citizens.
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JOE TOM HALTOM, 67, Chairman of BMC. Mr. Haltom previously served as
Chairman of BMC Bankcorp, Inc., which was acquired by the Corporation on May 31,
1994. Mr. Haltom was named a director of the Corporation in 1994. Mr. Haltom
also serves as a director of BMC, Graves, and United.
KERRY B. HARVEY, 37, a partner in the law firm of Owen, Harvey and Carter.
Mr. Harvey was named a director of the Corporation in 1994. Mr. Harvey also
serves as a director of BMC and United.
F. DONALD HIGDON, 63, retired. Mr. Higdon was formerly the General Manager
of Kraft Food Service, Inc. (a wholesale food distributor). Mr. Higdon has been
a director of the Corporation since 1991. Mr. Higdon also serves as a director
of Citizens.
WILLIAM J. JONES, 39, President and Chief Executive Officer of the
Corporation. Mr. Jones served as Executive Vice President of the Corporation
until January 1992, when he assumed his current position. Mr. Jones has been a
director of the Corporation since 1991. Mr. Jones also serves as a director of
Citizens, BMC, FCC, and Pennyrile.
TED S. KINSEY, 49, President and Chief Executive Officer of Parkway
Chrysler (an automobile dealership). Mr. Kinsey was named a director of the
Corporation in 1994. Mr. Kinsey also serves as a director of BMC.
LOUIS M. MICHELSON, 50, President and Chief Executive Officer of Michelson
Jewelers, Inc. Mr. Michelson has been a director of the Corporation since 1991.
Mr. Michelson also serves as a director of Citizens.
BILL B. MORGAN, 65, investor. Until 1992, Mr. Morgan served as a Brigadier
General in the United States Air Force. Mr. Morgan was named a director of the
Corporation in 1994. Mr. Morgan also serves as a director of BMC and Graves.
LOUIS D. MYRE, 68, retired physician. Dr. Myre has been a director of the
Corporation since 1983. Dr. Myre also serves as a director of Citizens.
DAVID M. PAXTON, 38, Vice President and Chief Financial Officer of Paxton
Media Group (a television broadcasting and newspaper publishing company). Mr.
Paxton has been a director of the Corporation since 1991. Mr. Paxton also serves
as a director of Citizens.
ROBERT P. PETTER, 59, President and Chief Executive Officer of Henry A.
Petter Supply Company (an industrial supply wholesaler). Mr. Petter has been a
director of the Corporation since 1983. Mr. Petter also serves as a director of
Citizens.
JOSEPH A. POWELL, 62, President and Chief Executive Officer of Old Hickory
Clay Company (a mining company). Mr. Powell has been a director of the
Corporation since 1991. Mr. Powell also serves as a director of Citizens.
WILLIAM A. USHER, 65, Chairman and Chief Executive Officer of Usher
Transportation Company (a trucking and transportation company). Mr. Usher has
been a director of the Corporation since 1991. Mr. Usher also serves as a
director of Citizens.
The Board of Directors has no reason to believe that any of the nominees
will be unavailable to serve as director. If any nominee should become
unavailable before the Annual Meeting, the persons named in the enclosed proxy
card, or their substitutes, or a majority of them, reserve the right to vote for
a substitute nominee selected by the Board of Directors. In addition, if any
stockholder or stockholders shall vote shares cumulatively or otherwise for the
election of a director or directors other than the nominees named above, or
substitute nominees, or for less than all of them, the persons named in the
enclosed proxy card, or their substitutes, or a majority of them, shall have the
right, in their discretion, to vote cumulatively for some number less than all
of the nominees named above or any substitute nominees, and for such of the
persons nominated as they may choose.
MEETINGS AND COMMITTEES
During 1994, the Board of Directors of the Corporation held nine regular
meetings and two special meetings. During 1994 the Executive Committee met
fifteen times, the Audit Committee met three times, and the Investment Committee
met two times.
Each of the directors attended at least 75% of the aggregate of (a) the
total number of meetings of the Board of Directors held during the period for
which he was a director, and (b) the total number of meetings held by all
committees of the Board which he served.
The members of the Executive Committee are Irving B. Bright, Jr., Patrick
J. Cvengros, Louis A. Haas, Joe Tom Haltom, William J. Jones, David M. Paxton,
and William A. Usher. The functions performed by the Committee include
4
acting as the Compensation Committee; making recommendations to the Board of
Directors in matters involving dividends, expansion plans, significant
expenditures and strategic initiatives; reviewing and making recommendations to
the Board of Directors regarding proposed directors, the compensation of
directors and the composition and size of the Board and its committees; and
reviewing credit policies and the adequacy of the allowance for credit losses of
each subsidiary.
The members of the Audit Committee are Louis A. Haas, Kerry B. Harvey, F.
Donald Higdon, David M. Paxton, Robert P. Petter, and Joseph A. Powell. The
Committee recommends to the Board the engagement of independent auditors;
reviews with independent auditors the scope and results of the audit engagement;
reviews the scope, frequency, and results of internal audits and examinations;
reviews the adequacy of the Corporation's system of internal accounting
controls; and reviews the examination reports of the Corporation and its
subsidiaries.
The members of the Investment Committee are Patrick J. Cvengros, William J.
Jones, Billy B. Morgan, David M. Paxton, Dr. Charles W. Ransler, and William A.
Usher. Dr. Ransler serves on the board of directors of Citizens. The Committee
reviews the composition and performance of the investment securities portfolios
of each subsidiary bank; establishes policies for monitoring the composition of
subsidiary's investment securities portfolios; and establishes policies for
monitoring interest rate risk for the Corporation.
The Corporation has no standing nominating committees. All nominations for
membership on the Board originated with the Board of Directors.
COMPENSATION OF DIRECTORS
In 1994, each non-management director of the Corporation was paid $200 for
each Board meeting or committee meeting attended.
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EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table contains information concerning compensation paid or
accrued by the Corporation and its subsidiaries for the fiscal years ended
December 31, 1992, 1993, and 1994 to, or on behalf of, the Corporation's Chief
Executive Officer and each of the four other most highly compensated executive
officers of the Corporation during 1994 whose compensation exceeded $100,000.
(A) (B) (C) (D) (E) (F) (G)
ANNUAL COMPENSATION
LONG-TERM COMPENSATION
NAME AND OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) OPTIONS(# SHARES)(2) COMPENSATION(3)
William J. Jones 1994 $180,000 $54,216 $ 0 20,000 $26,069
President and Chief Executive 1993 165,000 48,411 0 14,000 20,788
Officer, CBT and Citizens 1992 125,000 49,170 0 18,000 16,927
John E. Sircy(4) 1994 88,461 30,000 6,358 10,000 18,416
Executive Vice President and Chief 1993 0 0 0 0 0
Operating Officer, CBT and 1992 0 0 0 0 0
Citizens
M. Leon Johnson 1994 92,800 29,591 0 6,000 16,927
President and Chief Executive 1993 86,800 33,984 0 0 11,088
Officer, FCC 1992 82,000 27,657 0 0 12,308
C. Thomas Murrell, III 1994 115,513 30,000 0 6,000 12,284
Executive Vice President 1993 105,000 17,965 0 6,500 10,920
Commercial and Consumer Banking, 1992 100,000 17,400 0 3,000 6,206
Citizens
J. Russell Ogden, III 1994 106,072 18,610 0 5,000 11,132
Executive Vice President Financial 1993 96,720 16,549 0 6,500 9,923
Services, Citizens 1992 93,000 16,182 0 9,000 9,968
(1) The amount shown in column (e) represents the amount reimbursed to Mr. Sircy
in 1994 for the payment of taxes incurred in connection with his receipt of
relocation expenses.
(2) All option grants have been adjusted to reflect the October 1994 2-for-1
stock split.
(3) The amounts shown in column (g) for each named executive officer is the
total of the Corporation's contribution to the 401(k) and Money Purchase
(MPP) retirement plans, subsidiary directors' fees, reimbursement for
relocation expenses, and term life insurance premiums as summarized below:
TERM LIFE DIRECTORS' FEES RELOCATION 401(K)/MPP
Mr. Jones..................................................... $ 387 $9,500 $ 0 $ 16,182
Mr. Sircy..................................................... 155 2,750 15,511 0
Mr. Johnson................................................... 229 7,400 0 9,298
Mr. Murrell................................................... 240 0 0 12,044
Mr. Ogden..................................................... 221 0 0 10,911
TOTALS
Mr. Jones..................................................... $26,069
Mr. Sircy..................................................... 18,416
Mr. Johnson................................................... 16,927
Mr. Murrell................................................... 12,284
Mr. Ogden..................................................... 11,132
(4) Mr. Sircy joined the Corporation in April, 1994.
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OPTION GRANTS IN LAST FISCAL YEAR
Shown below is information on grants of stock options during the fiscal year
ended December 31, 1994, to the named executive officers.
INDIVIDUAL GRANTS
POTENTIAL
REALIZABLE
VALUE
AT
ASSUMED
ANNUAL
RATES
OF STOCK
PRICE
APPRECIATION
NUMBER OF % OF TOTAL OPTIONS FOR
SECURITIES UNDERLYING GRANTED TO EMPLOYEES EXERCISE OR OPTION
OPTIONS # IN FISCAL YEAR BASE PRICE EXPIRATION TERM
NAME GRANTED(1) 1994(2) PER SHARE($/SH) DATE 5%
William J. Jones............. 20,000 23.8% $19.125 01/04 $210,883
John E. Sircy................ 4,000 4.8% 20.375 04/04 44,933
6,000 7.1% 19.875 06/04 67,400
M. Leon Johnson.............. 6,000 7.1% 19.125 01/04 63,265
C. Thomas Murrell, III....... 6,000 7.1% 19.125 01/04 63,265
J. Russell Ogden, III........ 5,000 6.0% 19.125 01/04 52,721
NAME 10%
William J. Jones............. $519,415
John E. Sircy................ 110,673
166,009
M. Leon Johnson.............. 155,824
C. Thomas Murrell, III....... 155,824
J. Russell Ogden, III........ 129,854
(1) Options are not exercisable during the first two years after the date of the
grant. Thereafter, options may be exercised on or after the anniversary date
of the grant in three equal installments so that the full grant may be
exercised no sooner than four years after the date of the grant.
(2) A total of 84,000 options were granted to a total of seventeen (17) officers
of the Corporation and its subsidiaries during 1994.
FISCAL YEAR-END OPTION VALUES
Shown below is information with respect to the unexercised options to
purchase the Corporation's common stock held by the named executive officers at
December 31, 1994.
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS
OPTIONS AS OF 12/31/94 AT 12/31/94*
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE
William J. Jones......................................................... 28,500 46,000 $ 343,710
John E. Sircy............................................................ 0 10,000 0
M. Leon Johnson.......................................................... 0 6,000 0
C. Thomas Murrell, III................................................... 1,000 14,500 11,160
J. Russell Ogden, III.................................................... 20,500 17,500 243,805
NAME UNEXERCISABLE
William J. Jones......................................................... $ 262,427
John E. Sircy............................................................ 9,249
M. Leon Johnson.......................................................... 11,250
C. Thomas Murrell, III................................................... 75,820
J. Russell Ogden, III.................................................... 118,592
* Amounts shown represent the difference between exercise price and December 31,
1994 market value of $21.00.
EXECUTIVE OFFICERS
Information regarding the current executive officers of the Corporation,
including their names, ages, positions with the Corporation, and a brief
description of their business experience during the past five years, is
presented below. Executive officers are elected annually by the Board of
Directors.
WILLIAM J. JONES, 39, President and Chief Executive Officer and a director.
Mr. Jones also serves as President and Chief Executive Officer of Citizens. Mr.
Jones has been associated with the Corporation for the past 10 years. Additional
information regarding Mr. Jones is set forth on page 5.
JOHN E. SIRCY, 38, Executive Vice President and Chief Operating Officer.
Mr. Sircy also serves as Executive Vice President and Chief Operating Officer of
Citizens. Mr. Sircy joined the Corporation in his current role in April 1994.
Prior to that, he served as Vice President and Chief Financial Officer of First
Illini Bancorp, Inc., Galesburg, Illinois, until January 1991. At that time, Mr.
Sircy became Vice President and Controller of Norwest Bank Iowa, N.A. in Des
Moines, Iowa, until August 1992, when he was named Senior Vice President and
Chief Financial Officer, a position he held until April 1994.
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M. LEON JOHNSON, 54, President and Chief Executive Officer, FCC. Mr.
Johnson has been associated with the Corporation for 10 years, serving in his
current role.
C. THOMAS MURRELL, III, 51, Executive Vice President-Commercial and
Consumer Banking, Citizens. Mr. Murrell joined the Corporation in November 1991
as Senior Vice President and Chief Credit Officer. Prior to that, he served as
Executive Vice President of the Corporate Banking Group at First Security
National Bank and Trust Company, Lexington, Kentucky. Mr. Murrell assumed his
current role in March 1994.
J. RUSSELL OGDEN, III, 47, Executive Vice President-Financial Services,
Citizens. Mr. Ogden served as Senior Vice President of Trust and Investments
until March 1994, when he assumed his present position. He has been associated
with the Corporation for 13 years.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Corporation does not have a compensation committee of the Board of
Directors. However, all compensation matters, including executive compensation,
are decided by the Executive Committee of the Corporation, except as set forth
below. The following directors served on the Executive Committee during 1994:
Irving P. Bright, Jr., Patrick J. Cvengros, Louis A. Haas, Joe Tom Haltom,
William J. Jones, David M. Paxton, and William A. Usher. Director Cvengros was
an employee of the Corporation during 1994 and was until 1992, President and
Chief Executive Officer of the Corporation. Mr. Jones, President and Chief
Executive Officer, did not participate in any discussion or decisions regarding
his own compensation.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Executive Committee of the Board of Directors (the "Committee")
determines annually the compensation to be paid to the Corporation's chief
executive officer and other executive officers, including the executive officers
named in the Summary Compensation Table, except that the Stock Option Committee,
consisting of all members of the Committee, except Mr. Jones, made all decisions
about awards under the Corporation's stock option plans. This report discusses
the objectives and procedures used by the Committee to establish 1994
compensation for the chief executive officer and the four other officers named
in the Summary Compensation Table.
OBJECTIVES
The Committee's executive officer compensation policies are structured to
reward contributions to the Corporation's performance and to enable the
Corporation to compete favorably with peer institutions in attracting and
retaining highly-qualified individuals as executive officers. The Corporation
generally defines its peers as financial institutions of similar size located in
non-metropolitan areas in the southeast region of the United States. The primary
objective of the Committee's compensation policies is to pay for performance. As
a result, a significant portion of each executive officer's compensation for
1994 consisted of an incentive component with a pay-out based on the
Corporation's or subsidiary's performance for the year and the executive
officer's contribution to that performance.
EXECUTIVE OFFICER COMPENSATION
Executive officer compensation consists primarily of annual compensation
(comprised of base salary and an incentive amount) and long-term compensation
(consisting of stock options).
ANNUAL COMPENSATION
To establish annual compensation levels for 1994, the Committee evaluated
the Corporation's projected 1994 performance and available 1993 compensation
data from national surveys of industry peers. The compensation levels for 1994
were established to place the executive officers of the Corporation essentially
at the median of industry peers based upon projected performance. The
performance factors considered by the Committee include return on common equity,
asset growth and total shareholder return.
Individual base salaries for executive officers other than Mr. Jones are
recommended by the Corporation's chief executive officer and approved by the
Committee. Mr. Jones' base salary is determined by the Committee. Salaries are
reviewed
8
annually and adjusted periodically, typically at 12 months intervals. A salary
range for each executive officer position is established using survey data.
Adjustments are based upon the relationship of the executive officer's current
salary to the range for the position and a subjective evaluation of overall
company and personal performance. Base salaries paid in 1994 to executive
officers named in the Summary Compensation Table were near the median of
estimated base salaries of the industry peer survey data available. With respect
to Mr. Jones, the Committee considered his current salary compared to the median
of peer institutions and that the Corporation compared favorably to peers in
1993 in terms of return on equity, asset growth, and total shareholder return.
The Committee did not weigh any one factor more than another, but looked at the
Corporation's overall results.
The Committee also set 1994 incentive ranges, payable in cash, expressed as
percentages of base salary, for each executive officer other than Mr. Johnson
who, as President and Chief Executive Officer of FCC, is awarded incentive
bonuses under a separate plan. These incentive ranges were determined by
reviewing survey data and evaluating the impact of various incentive payments on
total annual compensation for executive officers.
Incentive awards are determined based on a two-step process. The first step
involves the calculation of actual performance with respect to previously
identified key performance measurement factors and peer group target levels.
Executive officers earn a corresponding percentage of base salary for each
performance factor based on actual performance results using a weighted tiered
matrix. The performance measurement factors (which, for each of the named
executive officers, were measured by the results of the Corporation's lead bank)
and corresponding weightings, in parenthesis, for 1994 consisted of non
performing loans (10 percent), net charge-offs (10 percent), net overhead
expense (20 percent), net interest margin (20 percent), and return on average
equity (40 percent). Depending on position, the percentages of base salary
varies. Executive officers may receive a maximum percentage of base salary of 43
percent. As a second step, individual payouts, excluding the President and Chief
Executive Officer, are then calculated based on the percentage completion of
quantitative and qualitative individual performance measurements established at
the beginning of the year. Mr. Jones received 100 percent of the award
calculated under the matrix based upon his individual performance during 1994.
Under a separate incentive bonus plan applicable to FCC, the President and Chief
Executive Officer of FCC receives 2 percent of FCC's pre-tax net income.
LONG-TERM COMPENSATION
Long-term compensation is provided in the form of stock options granted and
is intended to increase management ownership of stock and to provide an
incentive to executive officers to improve long-term Corporation performance.
All options are granted at fair market value and exerciseable in accordance with
the terms of the Corporation's incentive stock option plans.
In fixing the grants of stock options to the individual executive officers,
other than the President and Chief Executive Officer, the Committee reviewed
with the President and Chief Executive Officer his recommended individual
awards, taking into account the respective responsibilities and contributions of
each of the executive officers. The award to the Chief Executive Officer was
fixed separately by the Committee and was based, among other things, on a review
of competitive compensation data from national surveys, data from selected
industry peers, his total compensation, and his currently outstanding stock
options. The Committee also evaluated his past contributions and expected future
contributions to the Corporation's achievement of its long-term performance
goals including the fact that total shareholder return increased 12.2 percent
during 1994.
MEMBERS OF THE COMMITTEE:
Irving P. Bright, Jr.
Patrick J. Cvengros
Louis A. Haas
Joe Tom Haltom
William J. Jones
David M. Paxton
William A. Usher
9
COMPARATIVE STOCK PERFORMANCE
The Performance Graph set forth below compares the cumulative total
stockholder return on the Corporation's common stock for the last five fiscal
years with the cumulative total return of the NASDAQ Market Value Index ("Broad
Market Index") and the MG Industry Group 045 Index, the latter consisting of
thirty-four bank holding companies, ranging in asset size from $500 million to
$10 billion, located in the East South Central United States ("Peer Group
Index"). The cumulative total stockholder return computations set forth in the
Performance Graph assume the investment of $100 in the Corporation's common
stock, the Broad Market Index and the Peer Group Index on December 31, 1989 and
the reinvestment of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN OF THE CORPORATION,
PEER GROUP AND BROAD MARKET INDEX
(Comparison Graph appears here--plots points are listed as follows:
1989 1990 1991 1992 1993 1994
CBT CORPORATION 100 114.44 153.85 269.33 373.79 419.37
INDUSTRY INDEX 100 88.18 144.25 149.62 158.14 158.80
BROAD MARKET 100 81.12 104.14 105.16 126.14 132.44)
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
Upon a Change in Control of the Corporation, as hereafter defined, with
respect to the Corporation's 1993 Incentive Stock Option Plan (the "1993 Plan"),
and upon a takeover or merger of the Corporation, with respect to the
Corporation's 1986 Stock Option Plan (the "1986 Plan"), the exercise dates of
all outstanding options under the Corporation's stock option plans will
accelerate so that each option outstanding may be exercised on or after the date
of the Change in Control. In addition, the shares subject to the Corporation's
stock option plans will be converted into (automatically under the 1993 Plan and
at the discretion of the Plan Committee under the 1986 Plan) and replaced by
shares of common stock or other equity securities having rights and preferences
no less favorable than common stock of the successor and the number of shares
subject to the options and the purchase price per share upon exercise of the
options will be correspondingly adjusted so the there will be no change in the
aggregate purchase price payable upon exercise of any such option. Change in
Control of the Corporation, for purposes of the 1993 Plan, means (a) any share
exchange or merger or consolidation of the Corporation or a significant
subsidiary of the Corporation if either (i) the Corporation will not be the
surviving or acquiring corporation or will not own 100 percent of the
outstanding capital stock of the surviving or acquiring corporation following
consummation of the transactions contemplated by the plan or agreement of
exchange, merger or consolidation, or (ii) there will be a substantial change in
the proportionate ownership of outstanding shares of voting stock of the
Corporation as a result of the transactions contemplated by such plan or
agreement of exchange, merger or consolidation; (b) any sale, lease, exchange,
transfer or other disposition of all or any substantial part of the assets of
the Corporation or a subsidiary of the Corporation followed by a liquidation of
the Corporation; (c) the commencement of any tender offer, exchange offer or
other purchase offer for, and/or any agreement to purchase, as much as (or more
than) 30 percent of the outstanding Common Stock of the Corporation or a
subsidiary of the Corporation; or (d) the Board or the shareholders of the
Corporation approve, adopt, agree to recommend, or
10
accept any agreement, contract, offer or other arrangement providing for, or any
series of transactions resulting in, any of the transactions described above.
TRANSACTIONS WITH EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Corporation are at present, as
in the past, customers of subsidiaries of the Corporation and have had and
expect to have business and banking transactions with such in the ordinary
course of business. In addition, some of the executive officers and directors of
the Corporation are at present, as in the past, also officers, directors or
principal stockholders of corporations which are customers of subsidiaries of
the Corporation and which had and expect to have business and banking
transactions with such in the ordinary course of business. All such
banking transactions were made in the ordinary course of business, were made on
substantially the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other persons and, in
the opinion of management of the Corporation and its subsidiaries, did not
involve more than normal risk of collectibility or present other unfavorable or
unusual features.
Mr. Harvey, a director of the Corporation and BMC, is a partner in the law
firm of Owen, Harvey, and Carter, Benton, Kentucky, which was retained by BMC in
the last fiscal year and is proposed to be retained in the current fiscal year.
In 1994, Mr. Harvey's law firm received payment by BMC of approximately $140,000
for legal fees and retainers.
PROPOSAL TWO
AMENDMENT TO ARTICLES OF INCORPORATION
REGARDING INDEMNIFICATION
GENERAL
The Board of Directors recommends that the stockholders of the Corporation
consider and approve a proposal to amend the Articles of Incorporation of the
Corporation to add a new Article XIII which relates to indemnification of
directors, officers, employees and others. The text of proposed Article XIII
(the "Proposed Amendment") is attached to the Proxy Statement as Appendix A, and
the following description is qualified in its entirety by reference to such
text.
The Corporation's Board of Directors believes that it is appropriate and
advisable that the stockholders of the Corporation adopt the Proposed Amendment
to define those circumstances under which the directors and officers may be
indemnified by the Corporation. In assessing the recommendations of the Board,
stockholders should consider that all current directors may benefit from the
Proposed Amendment, and may thus be viewed to have a conflict of interest.
BACKGROUND AND REASONS FOR THE PROPOSED AMENDMENT
In performing his or her duties, a director of a Kentucky corporation is
obligated to exercise his or her business judgment in good faith, on an informed
basis and in a manner he or she honestly believes to be in the best interests of
the corporation. Decisions made on that basis are protected by the so-called
"business judgment rule". The business judgment rule is designed to protect
directors from personal liability to the corporation or its stockholders when
their business decisions are subsequently challenged. However, the expense of
defending lawsuits, the frequency with which unwarranted litigation is brought
against directors and the inevitable uncertainties with respect to the outcome
of applying the business judgment rule to particular facts and circumstances
mean that, as a practical mater, directors and officers of a corporation rely on
indemnity from, and insurance procured by, the corporation they serve as a
financial backstop in the event of such expenses or unforeseen liability.
Changes in recent years in the market for directors' and officers'
liability insurance have resulted in the unavailability in many cases of any
meaningful liability insurance coverage. Insurance carriers have in certain
cases declined to renew existing directors' and officers' liability policies, or
have increased premiums to such an extent that the cost for obtaining such
insurance has become prohibitive. Moreover, current policies often exclude
coverage for areas where the service of qualified independent directors is most
needed. For example, many policies do not cover liabilities or expenses arising
from directors' and officers' activities in response to attempts to take over a
corporation. In addition, policy deductibles have increased.
Although the Corporation has to date been able to obtain insurance coverage
for its directors and officers on a basis which it believes acceptable, there is
no assurance that such liability insurance will be available in the future on
acceptable terms.
11
The purpose of the Proposed Amendment is to insure that the Corporation
will continue to be able to attract individuals of the highest quality and
ability to serve as its officers and directors by offering them significant
assurance that they will not suffer inappropriate monetary liability for actions
taken in good faith and in a manner they believed to be in the best interests of
the Corporation. The Board of Directors of the Corporation believes that the
continued success of the Corporation in attracting and retaining qualified
directors and officers is dependent, at least in part, on the Corporation's
ability to be competitive with other corporations in providing the maximum
available possible protection from personal financial risks.
The Corporation's Bylaws, as adopted in 1983, acknowledge the Corporation's
responsibilities to its officers, directors, employees and agents by way of
indemnification under circumstances set forth and the limitations contained in
Kentucky's Business Corporation Act (the "Act"). The Corporation's Articles of
Incorporation presently do not contain any provision concerning indemnification.
The Proposed Amendment will provide greater rights of indemnification than those
contained in the Act and thus take advantage of the Act's present provisions
allowing for expansion upon the statutory indemnification provisions.
There are no pending or, to the knowledge of the Corporation or any
director or officer, threatened claims against any of the directors or officers
of the Corporation in their capacity as such for breach of their duty of care.
Nor is the Corporation or any director or officer aware of any facts or events
giving rise to a claim for indemnification.
KENTUCKY STATUTORY PROVISIONS FOR INDEMNIFICATION
Under the Act, a corporation may (but is not required to) indemnify a
director or officer against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement in connection with specified actions, suits
or proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation, i.e., a "derivative
action"), even if a director or officer is not successful on the merits, if the
director acted in good faith and in a manner he or she reasonably believed to be
in (or not opposed to) the best interests of the corporation, (and, with respect
to any criminal action or proceeding, had no reasonable cause to believe such
conduct was unlawful). A corporation must indemnify directors and officers who
are wholly successful, on the merits or otherwise, in the defense of any
proceeding, against reasonable expenses.
A similar standard of conduct is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
an action, and the Act does not permit indemnification where the person seeking
indemnification has been found liable to the corporation unless a court
determines that, in view of all of the circumstances, he is entitled to
indemnity for such portion of the expenses as the court deems proper.
Permitted indemnification as described above may only be made if it is
determined that indemnification is proper because the applicable standard of
conduct has been met. This determination may be made by a quorum of
disinterested directors, independent legal counsel or the shareholders. Upon
application of the person seeking indemnification, a court may also award
indemnification if the court determines that the director or officer is fairly
and reasonably entitled to indemnification in view of all the relevant
circumstances. A corporation's board of directors may also authorize the
advancement of litigation expenses to a director or officer upon receipt of an
undertaking by him to repay such expenses, if it is ultimately determined that
he is not entitled to be indemnified for them.
EXISTING PROVISIONS ELIMINATING LIABILITY IN CERTAIN CIRCUMSTANCES
Article XII of the Corporation's Articles of Incorporation provides that a
director of the Corporation shall not be personally liable to the Corporation or
its stockholders for monetary damages for breach of duties as director except
for liability (i) for any transaction in which the director's personal financial
interest is in conflict with the financial interests of the Corporation or its
shareholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for paying a
dividend or approving a stock repurchase, redemption, or other distribution in
violation of the Act, or (iv) for any transaction from which the director
derived an improper personal benefit.
Such provision effectively eliminates monetary liability of directors for a
breach of the duty of care, including in connection with mergers, takeovers and
other business combination transactions involving the Company. Articles XII
applies only to claims against a director arising out of his or her role as a
director and does not apply to the director's role as an officer or in any other
capacity or to the director's responsibilities under other law, such as the
federal securities laws. Article XII relates only to liabilities of directors to
the Corporation and its stockholders and does not affect liability to third
parties.
12
INDEMNIFICATION AS PROVIDED BY PROPOSED ARTICLE XIII
At present, unless any director or officer involved in litigation has been
successful, on the merits or otherwise, the Corporation may choose not to
provide indemnification in any particular case (although a person denied such
indemnification may apply to a court therefor). The Proposed Amendment provides
that the Corporation shall indemnify a director to the fullest extent permitted
by law and may indemnify an officer, employee or agent of the Corporation to the
fullest extent provided by law.
The Proposed Amendment provides indemnification for any person who at any
time is or was a director of the Corporation and who is threatened to be or is
made a party to any threatened, pending or completed action, suit or proceeding
by reason of the fact that such person is a director of the Corporation or
served at the request of the Corporation as a director or in another similar
capacity for another corporation. The Proposed Amendment covers civil, criminal,
administrative and investigative proceedings. The Corporation will hold such
person harmless and will indemnify such person to the fullest extent authorized
by the Act. In the event that the Act is amended, the indemnification will
expand to include any broader indemnification rights provided by the amended
Act. The indemnification will cover any expense, liability and loss reasonably
incurred or suffered by such person in connection with any of such proceedings.
Such person may be paid in advance of the final disposition of such proceeding
only if such person delivers an undertaking to the Corporation to repay all
amounts so advanced if its is ultimately determined that the he or she is not
entitled to indemnification.
If a written claim for indemnification under the Proposed Amendment has
been received by the Corporation, and the Corporation has not paid the claim in
full within 30 days, the claimant may bring suit against the Corporation to
recover the unpaid amount of the claim. If the claimant is successful, the
Corporation will pay the expense of prosecuting such claim. The Corporation has
the burden of proof to show that the claimant has not met the standards of
conduct which make it permissible under the Act for the Corporation to indemnify
the claimant. The termination of any action, suit or proceeding by judgment,
settlement, or by a plea of nolo contendere or its equivalent, will not, of
itself, create a presumption that the person did not meet the applicable
standard of conduct.
The indemnification provided by the Proposed Amendment is not exclusive of
any other rights to which a person seeking indemnification may be entitled.
Under the Proposed Amendment, the Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Act or the Proposed Amendment.
In addition, although the Board of Directors has no current plans to
provide for such additional indemnification, the Board of Directors could,
without stockholder approval, provide indemnification to directors, officers and
employees broader than that provided for under the Proposed Amendment, but only
to the extent permitted by applicable law. Limitations on the scope of
indemnification which may be provided under such arrangements have been held by
courts to be subject to public policy considerations and by substantive
restrictions in certain areas of the law.
The Proposed Amendment could increase costs to the Corporation in the
future in the event that claims for indemnification covered thereby were to be
asserted. Any increased costs, including potentially large damage awards, may be
satisfied directly from the Corporation's funds and may therefore affect a
stockholder's investment.
Insofar as indemnification for liabilities arising under the federal
securities laws may be permitted to directors, officers, or other persons
pursuant to the Proposed Amendment, the Corporation understands that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy and therefore unenforceable. The Corporation may be
required to undertake to submit issues regarding such indemnification to a court
of appropriate jurisdiction and to be governed by the outcome.
VOTE REQUIRED
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
THIS PROPOSAL. Because all current directors of the Corporation may be viewed to
have a conflict of interest, the affirmative vote of a majority of the issued
and outstanding shares of the Common Stock voted on the proposal (excluding
shares owned by or voted under the control of any director or any entity in
which a director has a material financial interest or in which he is a general
partner) is required to approve Proposal 2.
13
INDEPENDENT PUBLIC ACCOUNTANTS
For the fiscal year ending December 31, 1994, the accounting firm of
Deloitte & Touche, LLP served as the Corporation's independent public
accountants and auditors. A representative from the firm of Deloitte & Touche,
LLP is expected to be present at the annual meeting and will be available to
make a statement should he desire to do so, and respond to questions of
stockholders.
ANNUAL REPORT
UPON WRITTEN REQUEST, THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH
STOCKHOLDER, A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K WHICH IS
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION FOR THE YEAR
ENDED DECEMBER 31, 1994. ADDRESS ALL REQUESTS TO:
SECRETARY
CBT CORPORATION
P. O. BOX 2400
PADUCAH, KENTUCKY 42002-2400
STOCKHOLDERS' PROPOSALS AND OTHER MATTERS
Proposals by stockholders to be presented at the 1996 annual meeting of
stockholders must be received by the President of the Corporation at its
principal office no later than November 1, 1995, for inclusion in the proxy
statement and form of proxy relating to that meeting.
The Board of Directors of the Corporation does not know of any matters for
action by stockholders at the annual meeting other than the matters described in
the notice. However, the enclosed Proxy will confer discretionary authority with
respect to any other matters which may properly come before the meeting.
It is important that proxies be returned promptly. STOCKHOLDERS, WHETHER OR
NOT THEY EXPECT TO ATTEND IN PERSON, ARE REQUESTED TO RETURN THEIR PROXIES IN
ORDER THAT A QUORUM MAY BE ASSURED. Return may be made in the enclosed envelope,
to which no postage need be affixed.
By Order of the Board of Directors
William J. Jones
PRESIDENT AND CHIEF EXECUTIVE OFFICER
March 7, 1995
14
APPENDIX A
PROPOSED AMENDMENT TO ARTICLES OF INCORPORATION
OF
CBT CORPORATION
The Articles of Incorporation of the Corporation shall be amended to adopt
a new Article XIII which shall read as follows:
ARTICLE XIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
SECTION 1. DIRECTORS' RIGHT TO INDEMNIFICATION. Each person who was or is
made a party or is threatened to be made a party to or is involved in any
threatened, pending or completed action, suit or proceeding, formal or informal,
whether brought in the name of the corporation or otherwise and whether civil,
criminal, administrative or investigative (hereafter a "proceeding"), by reason
of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director of the corporation or is or was serving at
the request of the corporation as a director of another corporation, including
service with respect to employee benefit plans, whether the basis of such
proceeding is alleged action or inaction in an official capacity or in any other
capacity while serving as a director, shall, subject to the terms of any express
agreement between the corporation and such person, be indemnified and held
harmless by the corporation to the fullest extent authorized by Kentucky law, as
the same exists or may hereafter be amended, (but, in the case of any such
amendment, only to the extent that such amendment permits the corporation to
provide broader indemnification rights than said law permitted the corporation
to provide prior to such amendment) against all costs, charges, expenses,
liabilities and losses (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director
and shall inure to the benefit of his or her heirs, executors and
administrators; PROVIDED, HOWEVER, that the corporation shall indemnify any such
person seeking indemnity in connection with an action, suit or proceeding (or
part thereof) initiated by such person only if such action, suit or proceeding
(or part thereof) was authorized by the board of directors of the corporation.
Such right shall be a contract right and shall include the right to be paid by
the corporation expenses incurred in defending any such proceeding in advance of
its final disposition; PROVIDED, HOWEVER, that, the payment of such expenses
incurred by a director in his or her capacity as a director (and not in any
other capacity in which service was or is rendered by such person while a
director, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of such proceeding, shall be made only upon
delivery to the corporation of an undertaking, by or on behalf of such director,
to repay all amounts so advanced if it should be determined ultimately that such
director is not entitled to be indemnified under this Section or otherwise.
Repayment of all amounts so advanced shall be upon such terms and conditions, if
any, as the board of directors deems appropriate.
SECTION 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 1 of
this Article XIII is not paid in full by the corporation within ninety days
after a written claim has been received by the corporation, the claimant may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking has been tendered to the corporation)
that the claimant has not met the standards of conduct which make it permissible
under Kentucky law for the corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the corporation. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the claimant has not met the applicable
standard of conduct set forth in Kentucky law. Neither the failure of the
corporation (including its board of directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in
Kentucky law, nor an actual determination by the corporation (including its
board of directors, independent legal counsel, or its stockholders) that the
claimant had not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that a claimant had not met the applicable
standard of conduct.
SECTION 3. OFFICERS', EMPLOYEES' AND AGENTS' RIGHT TO INDEMNIFICATION. Each
person who was or is made a party or is threatened to be made a party to or is
involved in any threatened, pending or completed action, suit or proceeding,
formal or
15
informal whether brought in the name of the corporation or otherwise and whether
civil, criminal, administrative or investigative (a "proceeding"), by reason of
the fact that he or she, or a person of whom he or she is the legal
representative, is or was an officer, employee or agent of the corporation or is
or was serving at the request of the corporation as an officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action or inaction in an official
capacity or in any other capacity while serving as an officer, employee or
agent, may, subject to the terms of any express agreement between the
corporation and such person, by action of the board of directors, be indemnified
and held harmless by the corporation to the fullest extent authorized by
Kentucky law, as the same exists or may hereafter be amended, (but, in the case
of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment) against all costs, charges,
expenses, liabilities and losses (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred by such person in connection therewith; PROVIDED, HOWEVER,
that the corporation may, by action of the board of directors, indemnify any
such person seeking indemnity in connection with an action, suit or proceeding
(or part thereof) initiated by such person only if such action, suit or
proceeding (or part thereof) was authorized by the board of directors of the
corporation. The board of directors may, in its discretion, advance the payment
of expenses.
SECTION 4. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person by
Sections 1, 2 and 3 of this Article XIII shall not be exclusive of any other
right which such person may have or hereafter acquire under any statute,
provision of the articles of incorporation, bylaw, agreement, vote of
stockholders or disinterested directors or otherwise.
SECTION 5. INSURANCE. The corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
corporation or another corpora-tion, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person against such expense,
liability or loss under applicable law.
SECTION 6. SEPARABILITY. Each and every paragraph, sentence, term and
provision of this Article XIII is separate and distinct so that if any
paragraph, sentence, term or provision hereof shall be held to be invalid or
unenforceable for any reason, such invalidity or unenforceability shall not
affect the validity or enforceability of any other paragraph, sentence, term or
provision hereof. To the extent required, any paragraph, sentence, term or
provision of this Article XIII may be modified by a court of competent
jurisdiction to preserve its validity and to provide the claimant with, subject
to the limitations set forth in this Article XIII and any agreement between the
corporation and the claimant, the broadest possible indemnification permitted
under applicable law.
SECTION 7. EFFECT OF REPEAL OR MODIFICATION. Any repeal or modification of
this Article XIII shall not adversely affect any right of indemnification of a
director, officer, employee or agent existing at the time of such repeal or
modification with respect to any action or omission occurring prior to such
repeal or modification.
16
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APPENDIX
CBT CORPORATION
This proxy is solicited by the Board of Directors. The undersigned
stockholder(s) of CBT Corporation hereby appoints Patrick J. Cvengros and
Williams J. Jones, or either of them, as Proxies, each with the power to appoint
his or her substitute, and hereby authorizes them to represent and to vote as
designated below, all the shares of Common Stock of CBT Corporation which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be held
on April 18, 1995 or any adjournment thereof, with all the powers the
undersigned would possess if present personally at said meeting, or any
adjournment thereof.
1. ELECTION OF DIRECTORS
[ ] FOR ALL NOMINEES LISTED BELOW [ ] WITHHOLD AUTHORITY TO VOTE FOR ALL
(EXCEPT AS OTHERWISE INDICATED BELOW.) NOMINEES LISTED BELOW
Irving P. Bright, Jr., Patrick J. Cvengros, Louis A. Haas, Kerry B. Harvey, William J. Jones, Louis M.
Michelson, Louis D. Myre, M.D., Robert P. Petter, William A. Usher, John L. Burman, William H. Dyer, Joe Tom
Halton, F. Donald Higdon, Ted S. Kinsey, Bill B. Morgan, David M. Paxton, Joseph A. Powell
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST ABOVE.)
2. PROPOSAL TO APPROVE AN AMENDMENT TO THE ARTICLES OF INCORPORATION
REGARDING INDEMNIFICATION
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment
thereof.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. Unless authority to vote for the nominees
listed above is withheld, this proxy will be voted for the nominees listed above
with the discretionary authority described in the accompanying proxy statement
and "for" Proposal 2.
Please sign exactly as name appears below.
When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give full title
as such. If a corporation, please sign full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Signature
Signature (if held jointly)
DATED:
PLEASE MARK, SIGN, DATE, AND
PROMPTLY RETURN THE PROXY USING
THE ENCLOSED ENVELOPE.